Knowing what sets a business owner apart from someone who is self-employed can mean the difference between spending the majority of your time at the beach, or at the office. This is not to say that one title is automatically a better business decision than the other, but identifying the risks, roles, and traits for each will help you make a more informed decision for your business strategy. When you are defining goals and setting milestones for your business plan, making a decision to be a business owner or self-employed should be included in your final draft (along with an exit strategy, but that is another discussion).

Who’s the Boss? The choice to become self-employed is a concept taken from the idea that you are an individual who may not like working for others, or that you possess a go getter attitude. Either way self-employment is when you own a business, by yourself or with a partner(s), and you also provide the labor (time) required to keep the business open. Here are the key points that make up a self-employed entrepreneur: - Owns a Job The pro to becoming self-employed is it’s as simple as launching your own business idea. You do this by rolling up your sleeves and getting to work. The con to being self-employed is that you are putting yourself in a position where if you stop working then so does your business. I suggest this to my clients who have a great deal of passion for what they do, because when you love your work then it doesn’t feel like work. I also suggest this to my clients who have limited start-up funds, and leveraging debt is not a logical option. Use self-employment to bootstrap your business idea, until you see profits, then slowly make the transition from self-employment to business ownership by accumulating a solid staff of employees. - Is a Boss Since self-employed individuals own a job, that means that they are investing a lot of their time and effort into maintaining and developing that job, in order to stay competitive within their market. It could be a principle means of livelihood for them, so it’s no surprise that they are most likely to be the type to micromanage projects or want things done in a specific way, and in some cases it's down to the minutia of any operation. They are individuals who are not afraid to get their hands dirty next to their employees, but typically believe their way is not only the right way, but the only way.Owned! I’ve always seen a business owner as someone who owns a business, with partners and/or employees, and instead of providing the labor, they focused on providing a service (wisdom) to bring a business to the market. They are the brains behind the operation, in the sense that they were able to look at a business idea like they would a jigsaw puzzle, and figured out a way to put the pieces together so that the individual pieces will form the big picture (their business idea). As I’ve mentioned before, this isn’t a logical approach for all business ideas, see Small Business vs Micro Business. With the technology that is available to us today, it is possible to bootstrap most business ideas in the beginning to keep overhead costs low, then slowly transition into a business owner who: - Owns a System The difference between being a full-fledged business owner and being self-employed is that you own a system, not a job. This means that you develop a business idea like you are engineering an automated machine. There are moving parts that you must figure out how to piece together in order to manufacture a finished product or service to be offered into the market, absolutely hands free. The beauty of being a business owner is that your business ideas will continue to make you money with or without your involvement. This doesn’t mean you need to own a big business with five hundred plus employees and a CEO, etc. There are also small business models that create automated hands free operations, that don’t require you to hire any employees whatsoever. Some examples of systems are business models that include: 1. Copyright 2. Licensing 3. Branding 4. Royalties 5. Patents 6. Partnerships - Is a Leader Business owners do not micromanage. As mentioned above, imagine a business owner as an engineer who is building a machine. They are focused on fitting the right parts into the machine and letting the machine run the way it was intended. If the machine requires human labor to work (employees), then the owner must develop the leadership skills necessary to aid employees (including CEOs) in excelling in their functions to create synergy. It is in the owner’s best interest to empower any human involvement with the business so that it creates a sense of ownership throughout the business, because it will ultimately be the employees who will be directly responsible for the prosperity or failure of the business. If it is a smaller business the owner may have more flexibility to downsize and transition into a self-employed business to keep operations running, than a larger and more complex business model.